If you have submitted a tender over the last 6 months, it is highly likely that you would have been required to submit a Statement of Tax Record. This is a new and often unexpected requirement for most tenderers and always represents a mandatory requirement. So if government tendering is in your business development goals, particularly Commonwealth government, then applying for your Statement of Tax Record should be one of your first steps.
This requirement stems out of the Black Economy Procurement Policy introduced in July last year, which is an initiative by the Commonwealth Government to increase the integrity of government procurement. It ensures that procurement agencies are only awarding contracts to business who keep their tax obligations up to date, including registration, lodgment and payment with the aim to promote good tax behaviour and create an even playing field for businesses that comply with their tax obligations.
From 1 July 2019, new approaches to market over $4 million have required businesses (including new and foreign businesses) wishing to tender for Australian Government procurement contracts to provide a statement from the Australian Taxation Office (ATO) showing they have a Satisfactory Tax Record (STR). Similarly, any first-tier subcontractors with a subcontract for over $4 million are also required to hold an STR. Note that many smaller valued contracts and broad panel arrangements are also requiring an STR as a mandatory part of tender submissions.
STRs are simple to obtain, and if tender time frames are limited, a receipt showing your application for an STR will be adequate for the tender submission. This can then be followed up with a STR before contract signature should you be successful. The request for an STR is normally processed within four business days. Steps for applying for an STR are set out here.
An STR is valid for:
• 12 months from the time of issue – if you have an Australian tax record of four or more years
• 6 months from the time of issue – if you have an Australian tax record of less than four years.
Your STR must be valid at the tender closing date. You may need to provide an updated STR during the life of the contract if specified in the terms of your contract. More information is also available on the ATO’s STR page.